Report: Insider Trading Is Illegal Unless You're A Congressman

Thanks to a loophole in federal law, those elected to Congress are allowed to use inside information to buy and sell stock. Some allegedly take advantage of the information for personal gain.

Quoting a transcript of the news show The Insiders, CBS News reports many members of the Senate and House of Representatives have grown their wealth by making transactions that would have been considered illegal insider trades had they been conducted by people who are less privileged. Regardless, the practice of insider trading among congressmen is generally considered to be unethical.

One example given in the story is a member of a healthcare committee who discovers that Medicare will not cover a certain drug, setting up a potential opportunity to sell stock in the company that owns the drug before its market price takes a dive. According to a source in the story, who heads a conservative think tank, congressmen actively traded health company stock during the healthcare debate and pulled funds out of the market near the end of the last decade before the financial crisis came to light.

The story names specific congressmen who allegedly took advantage of the system. Check out the source link to read the transcript or watch the segment.